18 February 2010

Rebuilding Haiti May Cost $14 Billion, Study Shows

 

An aerial view of a makeshift tent city in Port-au-Prince February 17.

An aerial view of a makeshift tent city in Port-au-Prince February 17.

By Merle David Kellerhals Jr.
Staff Writer

Washington — A preliminary study by Inter-American Development Bank economists indicates that it could cost as much as $14 billion to rebuild Haiti’s homes, schools, roads and other structures damaged by a devastating earthquake in January.

“The earthquake, which hit about 15 kilometers (10 miles) southwest of the capital city, Port-au-Prince, was followed by several strong aftershocks and has caused significant loss of human life, hundreds of thousands of people displaced and severe damages to the economic infrastructure of the country,” the team of economists said in the report released February 16 in Washington.

“The study confirms that the Haitian earthquake is likely to be the most destructive natural disaster in modern times, when viewed in relation to the size of Haiti’s population and its economy,” the development bank said.

The preliminary report is based on complex comparisons with nearly 2,000 other natural disasters around the world between 1970 and 2008; it factored in the number of dead and missing in Haiti — believed to be between 200,000 and 250,000 people. A more detailed accounting of the cost of reconstruction — which is being conducted by the development bank, the World Bank and the United Nations Development Programme — will be completed in several months, the IADB said.

The Haitian government estimates the number of dead at 230,000 people, according to the development bank. The number of people displaced in the Port-au-Prince area is estimated at 700,000, the U.S. Agency for International Development (USAID) says.

The development bank study by economists Eduardo Cavallo, Andrew Powell and Oscar Becerra estimated that reconstruction costs could be as low as $8.1 billion or as high as $13.9 billion. “These estimates are useful to put this event into perspective and to inform the international community of the enormity of the challenge that lies ahead in the task of reconstructing Haiti,” the authors wrote.

“This sum will be beyond the scope of one agency or one bilateral donor, and so donor coordination will be key in any reconstruction effort,” they added. “The implications of such an estimate are significant. Raising such a figure will require many donors, bilateral, multilateral and private.”

The number of deaths is staggering for a country with a population of about 9 million, the authors said. But compounding the loss of life is that the magnitude 7.0 earthquake was centered in the Caribbean nation’s capital city — Haiti’s center of commerce, government and communications.

U.S. COMMITMENT

The United States, which began offering humanitarian assistance almost immediately, has already committed almost $600 million to Haitian relief and reconstruction efforts, according to USAID and Defense Department reports. President Obama is expected to request special funding for reconstruction of at least $1 billion from Congress soon, according to news accounts.

A worldwide donors’ conference is being planned for late March or early April, and most expectations are that the commitment will be for at least a decade.

In announcing an initial $100 million commitment to Haiti’s relief effort January 14, Obama pledged to the Haitian people that “you will not be forsaken. You will not be forgotten.”

In the immediate aftermath of the disaster, the United States rushed in a total of 13,000 U.S. military personnel to distribute food, provide shelter, help run the airport, provide medical assistance and support the Haitian government’s rescue efforts, according to Army Lieutenant General Ken Keen, the deputy commander of the U.S. Southern Command and the commander of the joint task force in Haiti. Keen was in Port-au-Prince at the time of the earthquake and was placed in charge of the U.S. relief effort by the president.

At a February 17 Pentagon briefing, Keen said that as the civilian assistance increases, “we see the need for our military assistance dwindling. However, at the present time, there’s still great need across the board, and we still remain decisively engaged, providing critical assistance to the government of Haiti and all the organizations.”

On February 16, U.S. Trade Representative Ron Kirk announced a plan to encourage U.S. clothing manufacturers and retailers to help rebuild Haiti by importing 1 percent of their apparel production from the earthquake-ravaged country. Haiti’s clothing sector accounted for about 75 percent of the country’s exports and employed more than 25,000 Haitians before the earthquake.

U.S. trade officials hope a vigorous response to the Plus 1 Percent program would encourage investors to get Haitian clothing factories back into operation as quickly as possible. The United States and Haitian governments are working with U.S. and Haitian companies to remove roadblocks to Haitian apparel exports, Kirk’s office said.